Reviewing the Telco Act: Let’s get it right the first time

Right now, the Government is part-way through a review of the Telecommunications Act. This will set rules for how broadband services operate in New Zealand, ultimately determining the quality of services we all get and the prices we pay for them. It’s a complicated process and as a nation we need to take the time now to get it right.

Better services at fair prices

At InternetNZ, we’re using this review to push for better services at fair prices. The rollout of UFB fibre, together with improvements in mobile access, allows fast, reliable Internet access for all New Zealanders - or at least, it can do. There is amazing potential here. New Zealand could have a world where bandwidth is no limit on how Kiwis use and benefit from the Internet. That would unlock huge changes in everything we do online, from exporting our expertise in data science, film production, farming, and education, to high quality communication in and between families, health providers and so on, through to the delights of video and gaming entertainment options.

Realising that potential means getting the details of this review right. The vision of getting rid of bandwidth as a problem - of running these networks at full speed - faces significant opposition. While we are comfortable with the overall “utility-style” model proposed in general, we see a few key challenges which the review has to address.

We need clear guidance on the Government's priorities

Firstly, there is a need for clear guidance on the Government’s priorities and desired outcomes. Getting the maximum possible benefit from the country’s huge investment in better networks should be the priority. Better services need continuing investment over time. Those investments will only come if there is predictability about how regulation will operate, and how fair returns can be earned. There are some trade-offs to be made, and the proposals so far offer limited guidance on what outcomes the Government would prefer. Now’s the time for clarity.

Regulation should allow users on copper to access better services over time

Secondly, there is the challenge posed by our old copper phone and broadband network. Copper is being overtaken by fibre in UFB areas, and faces competition from ever-faster mobile and wireless services across the map. Users still on copper today have the most to gain from these better alternatives. Regulation must not stop users from taking up these better services over time. The review proposals, as we read them today, would mean all Internet users subsidise the continued provision of old, slow, copper services. That’s not efficient, and it does not deliver the potential of our 21st century networks.

Talking about networks, our UFB network enables world-class Internet speeds in New Zealand. There are fibre services running at 1 Gbps today, four years before the new regulatory framework starts. This reality is raising the bar for “good Internet” right now. With that in mind, we think new rules, applying from 2020, should deliver the potential of our networks. They shouldn’t be held up by yesterday’s speed limits.

Breaking through yesterday's speed limits

The Government has set targets for 2025: 50 Mbps to 99% of Kiwis, and 10 Mbps to the rest. Those were great targets when they were announced, because they marked a step change on where New Zealand was at. Today, let alone by 2020, we must be more ambitious. In particular, we think this ambition should flow through to the core “anchor” services under the new framework, which would offer a range of wholesale services with a specified speed at a set maximum price. The draft anchor products would fail to deliver 21st century Internet to users - they aren’t even at the curve today. Instead, we will propose a set of anchor products with faster options, and which improve over time. This evolution to better services is needed so that the price-capped anchors stay relevant, and so everyone in New Zealand shares the benefits of better technology.

Ultimately, the new rules that come out of this Review get passed into law by Parliament, and will then be enforced by the Commerce Commission. The Commission will play a key role, and should be given the tools and guidance it needs to deliver. The level of rigour and debate around Commission processes can mean these take a very long time. It is critical that key elements of the proposed regime are set by the Government, and that clear guidance informs the remainder. Otherwise, delays and uncertainty might compromise the potential for better services at fair prices.

The next step for us is to put in our formal submission on Friday September 2, just over a week from now. Before we do that, we’re seeking input from our members, and from others who are interested. We want to reflect a broad range of views, and to test our ideas to ensure they make sense. There are some complex issues here - detailed technical issues that we haven’t raised in this post - like the prospect of fibre unbundling, and whether it can be made to work for the long-term benefit of users. If you’re interested, get in touch!

Let's allow further input and share our perspectives

Finally, back to the headline. This is complicated stuff. We think the submissions that MBIE gets from the sector are going to be pretty complicated and comprehensive. It is quite likely they will raise new points and perspectives that haven’t been thought about. If they are, we encourage the officials and the Minister to ask for further input that considers that analysis and sharing of perspectives. It’ll help get the draft legislation right and save more time later than it takes to do. We hope other people following this debate agree, and will ask for the same thing.